- Austin added 36,511 net new jobs, growth of 3.4%, in the 12 months ending in September, making Austin the fastest growing Texas metro.
- Information grew by 14.9% (5,015 jobs), making it Austin’s fastest growing industry, while professional and business services added the most jobs, 10,062 (or 5.3%), over the last 12 months.
- Austin's seasonally adjusted unemployment rate is 2.7%, unchanged from August.
Nonfarm payroll jobs
The Austin metropolitan area added 36,511 net new jobs, or 3.4%, in the 12 months ending in September, according to Friday's releases of preliminary payroll jobs numbers by the Federal Reserve Bank of Dallas. (See a SIDEBAR at the bottom of this page for comments about the Current Employment Statistics data from the Texas Workforce Commission and U.S. Bureau of Labor Statistics that the Dallas Fed uses to produce these estimates.)
Austin’s 3.4% growth makes it the best performing among Texas’ 23 metro areas. Laredo was the next fastest growing with 2.9%. One metro, Wichita Falls, saw negative growth of 1.0%.
For the year ending in September, private sector growth in the Austin MSA is 3.9%, or 35,178 jobs, with all private industry divisions, but one, adding jobs. Austin's sizable government sector (17% of jobs) grew by only 1,333 jobs or 0.7%, thus bringing the overall growth rate to 3.4%.
Texas saw net private sector job growth of 2.7% with all private industries, but one, adding jobs over the last 12 months. Total job growth was 2.3% as the government sector, which accounts for nearly 16% of total state employment, saw slight growth (0.6%). For the nation, private sector growth is 1.6% for the 12 months ending in September with all private industries, but one, adding jobs. Overall job growth is a more modest 1.4% because of minor (0.7%) government sector growth.
Seasonally adjusted jobs for September are down from August by 1,500 jobs or 0.1% in Austin. September jobs are up from August by 0.3% in San Antonio, 0.2% in Houston and Fort Worth, and 0.1% in Dallas. Statewide, seasonally adjusted jobs are up 7,385 or 0.1%. Jobs are also up from August by 0.1% nationally.
In Austin, professional and business services added the most jobs, 10,062 (5.3%), over the last 12 months. The fastest growing industry was information which grew by 14.9% or 5,015 jobs. Also growing at faster-than-average rates are transportation, warehousing and utilities (11.1% or 2,478), other services (6.1% or 2,800); leisure and hospitality (6.0% or 7,747); and manufacturing (4.4% or 2,656). Education and health services jobs fell by 222 or 0.2%.
Statewide, construction and natural resources grew fastest, by 5.1%, and added the most jobs, 50,519, over the last 12 months. Other relatively fast growing industries included transportation, warehousing and utilities (3.7%); financial activities (3.6%); leisure and hospitality (3.1%); manufacturing (2.9%); and professional and business services (2.8%). Retail trade jobs fell by 0.4%.
Nationally, education and health services grew fastest, adding 2.6% over the 12 months ending in September. Professional and business services (2.1%); leisure and hospitality (2.1%); construction and natural resources (1.9%); and transportation, warehousing, and utilities (1.8%) were also relatively fast growing. Retail trade lost jobs (down 0.4%).
The net gain for private service-providing industries in Austin is 31,896 jobs, or 4.1%, over the last 12 months. Employment in goods producing industries is up by 3,281 jobs or 2.6%. Statewide, private service-providing industries are up 200,638, or 2.3%, and goods producing industries are up 75,861 jobs, or 4.0%.
Labor force, employment & unemployment
We also now have September labor force, employment, and unemployment numbers for Texas and local areas in Texas. The same data for all U.S. metros will not be released until October 30. In August, Austin had the sixth lowest rate of unemployment among the 50 largest metros (San Francisco and Boston had the lowest rates).
Unemployment numbers for September show Austin’s performance relative to the state and other major Texas metros being sustained. In September, Austin’s seasonally adjusted rate is at 2.7%, while the other major metros range from 3.0% in San Antonio to 3.6% in Houston. Dallas and Fort Worth are at 3.1% and 3.2% respectively. Austin’s rate is unchanged from August, while rates in the other major Texas metros are each one tenth of a percentage point lower. The state’s seasonally adjusted rate is 3.8%, up from 3.4% in August. Nationally, unemployed fell from 3.7% in August to 3.5% in September.
Austin’s rate one year ago was 2.9%. The statewide seasonally-adjusted rate is now 3.8%, up from 3.7% in September of last year. The national unemployment rate is 3.5%, improved from 3.7% a year ago.
Within the Austin MSA, Travis County has the lowest unemployment rate in September, at 2.5%, while Caldwell County has the highest at 3.3%. The rate is 2.8% in Williamson and Hays Counties and 2.9% in Bastrop County. Note that county rates are not seasonally adjusted.
Seasonally adjusted unemployment rates for Texas metros are produced by the Federal Reserve Bank of Dallas. (The TWC also produces seasonally adjusted rates for Texas metros, but publication lags the Dallas Fed’s data.)
With Austin’s unemployment rate down from one year ago, the number unemployed has also fallen. In September 2018, Austin’s number of unemployed was 34,647. Over the last 12 months, the unemployed declined by 2,740 or 7.9%, to 31,907. This is due to a larger increase in the number employed, compared to labor force. The Austin metro’s civilian labor force (employed plus unemployed) increased by 17,593 persons or 1.5% from one year ago, while persons employed increased by 20,333 or 1.7%.
Texas’ employment growth (304,070 or 2.3%) also exceeds labor force growth (262,848 or 1.9%). Thus, the number of unemployed decreased by 41,222 or 8.0%. Nationally, September civilian labor force is up by 2.0 million or 1.2%, while employed is above the level of a year ago by 2.3 million or 1.5%, and 301,000 fewer people (5.2%) are unemployed.
October estimates will be released on November 15.
The Chamber’s Economic Indicators page provides up-to-date historical spreadsheet versions of Austin, Texas and U.S. data for both the Current Employment Statistics (CES) and Local Area Unemployment Statistics (LAUS) data addressed above.
This monthly article on new labor market data customarily relies on the Current Employment Statistics (CES) data as released by the Texas Workforce Commission and the U.S. Bureau of Labor Statistics. This month we are electing to focus on the version of this data produced by the Federal Reserve Bank of Dallas.
As we’ve noted in the last several monthly articles about the CES data, when we see atypical growth rates in Austin’s nonfarm payroll jobs data, we sometimes look at an alternative payroll jobs dataset, the Quarterly Census of Employment and Wages (QCEW) to see how consistent the two datasets appear. QCEW, which is derived from the universe of unemployment insurance-covered employer payroll records, informs the annual benchmark revisions to the sample-survey-based CES data. QCEW data, which is now available through March 2019, gives some evidence that Austin’s recent job growth may be more robust than preliminary CES data indicates.
The Federal Reserve Bank of Dallas produces a version of nonfarm payroll jobs that benchmarks to QCEW data quarterly instead of annually. The Dallas Fed’s early-benchmarked and seasonally adjusted data indicates that Austin’s job growth for the year ending in September is 3.4%. In contrast, BLS/TWC data, which is benchmarked to QCEW through the third quarter of 2018, provides a growth estimate of 1.7% for the year ending September.
While most media reporting on the labor market relies on the BLS/TWC CES data, it can be helpful to be aware of limitations of the sample survey at the local level and the potential for actual growth to be higher or lower than preliminary estimates indicate. Many types of investment decisions—residential or commercial construction, for example—are made based on a market’s current job growth performance, so it can be unfortunate to misidentify market conditions.
As a relatively fast growing metro, it may be that the sample survey of employers in our area sometimes becomes insufficiently representative. With unemployment as low as it has been in Austin over the last couple of years, and for other reasons, such as a probable decrease in migration due to similarly low unemployment rates elsewhere, it is reasonable to expect Austin’s job growth to slow, but with the divergence between CES and QCEW data we see in ‘18Q4 and ‘19Q1, there is a basis to question if growth is currently quite as low as 1.7%
Note that the Excel file of nonfarm payroll jobs time series data on the Chamber’s Economic Indicators page includes not only the CES data (total, private, and major industry sectors), but also the QCEW series (total and private industry), and the seasonally adjusted and early-benchmarked Dallas Fed series (total).
Related Categories: Central Texas Economy in Perspective